TOKYO -- Sega Corp., once a leader of the video-game market, said it is on track to post a group operating profit for the current fiscal year, a sign that the beleaguered company's decision to quit the game-console business is slowly paying off.

But Sega, of Sonic the Hedgehog fame, warned that it expects a group net loss of 15 billion yen ($123.8 million) for the year ending March 31, 2002, due in part to the falling value of its...